Protesters march in Detroit to block financial emergency law

DETROIT (Reuters) - Protesters chanted slogans and marched on government buildings in Detroit on Thursday in support of a lawsuit that seeks to halt Michigan state-appointed emergency managers taking over six economically strapped cities, including the home of the U.S. auto industry.

The lawsuit, filed on Wednesday by a coalition of civil rights and religious groups, labor leaders and elected city officials, claims that Michigan's emergency manager law enacted in December "effectively establishes a new form of government" in the state.

The suit in federal court in Detroit seeks an injunction to prevent emergency managers in "Motor City" and five other Michigan cities, as well as three school districts, from exercising broad powers that go into effect Thursday.

The law allows the managers to take actions usually reserved to elected mayors and city councils, without city oversight. In Detroit, a former bankruptcy lawyer, Kevyn Orr, has been appointed to that job by Michigan governor Rick Snyder, a Republican.

Orr began his tenure in Detroit on Monday, and the lawsuit comes as he begins to form plans to help Detroit overcome $14 billion in long-term debt and liabilities, and a fiscal-year deficit expected to reach $100 million.

Detroit is the largest of six cities, including Pontiac and Flint, where emergency managers have been appointed.

Snyder, speaking to reporters on Thursday, said the lawsuit was "part of democracy" and added, "our track record is pretty good in winning lawsuits."

Orr's spokesman, Bill Nowling, declined to comment. He said Orr would "make any response through legal counsel in court."

Herb Sanders, one of the attorneys who filed the lawsuit, said at a rally outside the federal courthouse that the new law "is one of the most egregious pieces of legislation in recent history.

"The governor can arbitrarily determine what communities will have a democratic form of government and what communities will have a dictator. We now have a dictatorship in Detroit," Sanders said.

Elected officials from Benton Harbor, a group of Baptist preachers from Detroit, board members of the Detroit Public Schools and representatives from the American Federation of State, County and Municipal Employees were among those named as plaintiffs in the lawsuit. Snyder and the state's treasurer, Andrew Dillon, a Democrat, were named as defendants.

About 75 protesters entered the Coleman A. Young Municipal Center at Noon, singing protest songs, chanting "No Justice, No Peace," and blocking the main public access to city hall, where Orr's new office is located.

Earlier, about 150 protesters rallied in front of the courthouse before some marched to the Young Center a few blocks away. Among those attending the rally were national civil rights leader, the Rev. Al Sharpton, and Lon Johnson, the head of the Michigan Democratic Party.

"There will be a threat to everyone in this nation if the emergency management of Detroit stands," Sharpton said.

Emergency managers in Michigan are given broad power, including the right to void labor contracts.

The new law, called Public Act 436, was passed by the Republican-controlled Michigan legislature and signed by Snyder in December. It replaced another law that was overturned by the state's voters in a November referendum.

The lawsuit said the new law is weighted against the state's black residents.

"There is no question that Michigan's emergency manager laws have disproportionately impacted the state's population of citizens from African-American descent," it said.

About 83 percent of Detroit's 700,000 residents are black. Sanders said just over half of Michigan's black residents are living in cities under the control of an emergency manager.